Transfer on Death Deed or Joint Tenancy?
Dear Len & Rosie,
My sister is planning to write her will and give her house to me upon her death. She already has advance directive. She nor I can afford to retain an attorney for his or her services. She wants to write what she wants and have it notarized. Her house is her only asset. I realize since you are attorneys, it’s a given that you advise, no, don't to that. We just plain cannot afford legal services. Will a notarized will be a problem? There is no one to contest her decision so that would not an issue. Should we use one of those digitized form templates and have that notarized? Thank you in advance.
Maria,
Dear Maria,
Our advice in this column is always at no charge. We write the column to inform the public of their options regarding estate planning and some common pitfalls to avoid.
Wills are not notarized in California, ever. Wills must be witnessed by two adults who are not inheriting under the will. If your sister wants a cheap and easy will, she can download one from the California State Bar webpage at www.calbar.ca.gov. Or she can just email us and we’ll email her the form.
The problem with wills is that they do not avoid probate, which is every expensive and takes one to two years to complete. If your sister wants to avoid probate, she has a couple of more options. One is to sign and record a Transfer On Death Deed from herself to you. She can have a lawyer prepare the deed, or she could pay a Title Insurance Company to do is for her. We don’t recommend doing it yourselves, because it’s way too easy to make expensive mistakes when drafting deeds.
An alternative may be better. If the two of you live together in your sister’s home, she could add you on the deed as a joint tenant. If she does, and more than a year passes before her death, you will inherit the home without probate and without a reassessment under Proposition 13 because you’re a cohabitant. This would likely save you thousands of dollars in property tax every year. There is a downside to a joint tenancy deed, which should be kept in mind. Your name won’t come back off the deed unless you die first or willingly sign the home back to your sister. A joint tenancy deed is an irrevocable step, so she had better be sure she’s not ever going to change her mind about you getting the property.
Your sister, and you for that matter, should also have a Durable Power of Attorney in addition to her will and advance health care directive. While she can have a lawyer prepare one for not much money, there are also forms available for this on the Internet. She should look for the California Statutory Durable General Power of Attorney online.
Len & Rosie